Why Did Cloudflare Stock Jump

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Shares of Cloudflare (NET) climbed 79.7% from January 31 to October 28, 2026, outpacing the 12.5% return of the S&P 500. The advance spanned three quarterly reports, ending with the most recent on August 6. The path was uneven: shares fell 23.6% on May 8, after the first-quarter report came with a 20% staff cut, and rose 10.5% on September 9 on a security partnership with OpenAI. The current share price appears to assume that developers and AI companies will sustain fast enough sales growth for the company to reach a reported profit. So are Cloudflare's sales really growing faster?

Cloudflare's Sales Are Growing Faster Than A Year Ago

So far, yes. Cloudflare generated $696 million in sales during the second quarter of fiscal 2026, reported on August 6. Revenue grew 35.9% in the quarter, compared with a 27.8% pace in the same period a year earlier.

The company is also securing larger contracts. Cloudflare announced in its February 10 report that it closed its largest deal on record by annual contract value, averaging $42.5 million a year. By the August 6 call, the number of customers paying more than $100,000 a year climbed 27% from a year earlier.

Management credits rapid growth in its Workers developer platform in particular. The company's own outlook is slower, however. Cloudflare guided to third-quarter revenue growth of 31%, with management stating they set guidance prudently as a shift toward pool-of-funds and consumption-based deals makes each quarter harder to forecast.

How Far Has Cloudflare's Operating Loss Narrowed?

Over the twelve months ending in June 2026, Cloudflare posted an operating loss equal to 8.1% of revenue. That margin narrowed from 9.9% a year earlier and 11.6% two years earlier.

The company's net loss widened to $170 million in the second quarter of fiscal 2026, up from $50.4 million a year earlier. Management reported $151 million in severance and other restructuring charges for the quarter. The filings data records those charges below the operating line, so the 8.1% operating loss above leaves them out. Without those expenses, executives said the net loss would have been roughly $18 million.

During the August 6 call, management said Cloudflare is pacing ahead of its goal to reach a GAAP profit by the end of 2028 at the latest. That is a target, not a result.

What Are You Paying For Cloudflare's Sales Now?

At the October 28 close, investors paid 45.0 times Cloudflare's sales over the past twelve months, compared with 3.2 times for the S&P 500. Based on those same twelve months of sales, the multiple was 34.6 at the end of June. The valuation climb since then has come from a higher price on revenue Cloudflare had already reported.

Executives noted on the August 6 call that Cloudflare has not broken out revenue by product area, though Workers has become a meaningful contributor to revenue. Consequently, the Workers platform has no revenue figure of its own yet.

Cloudflare has posted an operating loss for every twelve-month period ending in a quarter since June 2019, although the most recent deficit was the smallest as a share of revenue. The faster sales growth has held so far, while a reported profit has not arrived yet. Cloudflare's reported operating margin is the figure to watch when the company reports its third quarter in November 2026.

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